CMS Overpaid Hospitals $38.2M for Short-Stay Claims

Payments to hospitals were made when elective surgeries failed to take place and inpatient claims did not meet Medicare's admission requirements, says a report from the Office of Inspector General.

Over a two-year period, the Centers for Medicare & Medicaid Services paid an estimated $38.2 million to hospitals for unnecessary short-stay inpatient claims related to canceled elective surgery procedures.

According to a report issued Tuesday by the Office of Inspector General in the Department of Health and Human Services, no clinical conditions existed to justify the admissions. So when the elective surgery failed to take place for one reason or another, the inpatient claim did not meet Medicare's requirement that the admission be reasonable and necessary.

The $38.2 million estimate is based on an OIG review of 100 sample short-stay claims and surgery cancellations in 2009–2010 where 80 of those claims did not meet the reasonable and necessary test for Medicare payment. Among the unacceptable reasons for the surgery cancellations after a short stay: hospital equipment failures, lack of operating rooms, and staff scheduling conflicts.